Tuesday, May 18, 2010

Leave your wallet at the door: out-of-area agents will cost you

There's a trend afoot in California: a move toward a single MLS system through which an agent from anywhere in the state can market a property anywhere else. As a homeowner, should you choose this option in the future, count on getting less of what you expect from a full-service Realtor.

Out-of-area agent = less market knowledge, less marketing, less negotiating, and less money.

No matter how much the online world has connected us, there is no way an agent from 30, 50, 100, 200 or more miles away can possibly no the subtle aspects of a local market. Sure, they can look at the comps and make a decent determination on price. However, they don't have the local connections or market knowledge to know what price will trigger multiple offers. How do they know where to advertise? Can they distribute flyers to local brokerage managers to give to agents? Can they present at the local broker tour? All those questions will get a "no" from an out-of-area agent.

In Los Altos and other communities, the best agents are the local agents. They know the market because they work here. I'd say that holds true for most other communities.

When evaluating a agent to sell your home, look at how many homes they've sold in the area, what they know, and who they know. Local strength is built on relationships in the neighborhoods and among the other local agents. That will translate into a better marketing plan and more money in your pocket.

For home buying, it's different. It's hard to refute the data on local sales no matter how far away they are. Most agents can run a market analysis on any home. Even then, a 1/4 mile can make a big difference. It's possible to see more agents from out of the area representing buyers and being marginally effective. However, I don't see them being effective on the sales side.

What do you think?

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